As part of a massive deal, San Diego buys water from Imperial County and has paid the much-smaller county’s farmers not to plant their fields. But San Diego also sent money east to make up for economic development that the county misses out on thanks to the lack of farming.
By paying their water bills, San Diego residents have sent $2.5 million to help reopen a slaughterhouse in Imperial County.
It’s one project of many that San Diegans supported through water payments that were earmarked for Imperial County, our neighbor to the east. There’s $346,000 and counting to fight cancer, $1 million to a food bank, $2.5 million to get an ethanol plant up and running, $15,000 to purchase tools for a body shop, $650,000 to expand a tortilla-making business, and $5,000 help a Methodist church hand out food and gas vouchers.
These payments are part of a massive water deal between the San Diego County Water Authority and the Imperial Irrigation District. The Water Authority buys water and resells it to local water agencies, like the city of San Diego’s water department.
For 15 years, San Diego County has been buying water from Imperial County, the largest holder of rights to water in the Colorado River. Imperial — a county of 180,000 people — is entitled to as much of the river as the states of Arizona and Nevada combined.
In the mid-1990s, San Diego, with growing cities and no water rights to speak of, started negotiations to get some of that water.
At first, officials promised the deal would never involve fallowing. That’s when farm land is idled and left barren to free up water that would have otherwise grown food. For farmers, fallowing is the “f word,” said Tina Shields, the Imperial Irrigation District’s water manager.
Eventually, it became clear that the deal wouldn’t work without fallowing, since it’s the easiest way to free up a lot of water. The final deal included 15 years of fallowing.
Idled farmland is inherently unprofitable — unless someone pays farmers not to farm. That’s exactly what San Diego and Imperial agreed to do. San Diego paid Imperial to pay farmers not to farm.
From 2003 until the program ended last year, farmers got $161 million not to plant their fields. At the program’s height, nearly 400 fields covering 34,000 acres were idle.
Farmers were taken care of, but Imperial County officials worried about businesses that indirectly benefit from farming. The farm services industry — beekeepers, earth movers, seed sellers, crop dusters — weren’t made whole like the farmers were.
One panel of independent economists did a study and said Imperial could still come out ahead from the whole deal. The Water Authority touted that figure.
Imperial had its own economic models that showed the deal would hurt businesses across the county.
“So then we had dueling economists and no matter who you work for, that’s never a good thing,” said Dan Denham, the Water Authority’s assistant manager.
Eventually, the Water Authority and Imperial reached a new deal. They agreed to set aside $50 million to boost parts of Imperial County that may be indirectly affected by fallowing. In the context of the water transfer, that’s nothing – all told, San Diego plans to spend somewhere between $3 billion and $7 billion over 45 years on water from Imperial County.
On paper, $30 million of that comes from San Diego and $20 million comes from Imperial. But a substantial chunk of Imperial’s share is still coming from San Diego, since such a large share of the irrigation district’s budget comes from San Diego ratepayers. How big that share is depends on who is doing the math; the Water Authority says it’s about 60 percent, Imperial says it’s more like 30 percent.
Either way, Imperial uses money from San Diego to keep water rates low for its farmers. The Water Authority pays $650 to Imperial for an acre foot of water — which is enough water to cover an acre of land in a foot of water. Imperial uses that money to keep its rates low. A farmer in San Diego pays at least $695 for an acre foot of water; a farmer in Imperial pays only $20. That’s one reason the amount of farming in San Diego is expected to keep shrinking.
Which brings us back to the $50 million. The Water Authority decided it wanted no part in deciding how to hand out that money, so it turned things over to the Imperial Irrigation District’s staff and five-member elected board.
The irrigation district, known as IID — pronounced “eye, eye, dee” — is the most powerful political player in Imperial County. It not only oversees water, the lifeblood of the Imperial Valley, but is also the county’s electricity provider.
It took the $50 million and came up with two ways of spending it. About two-thirds — $30 million so far — would go to companies indirectly hurt by fallowing.
The rest — $12 million so far and counting — would go to community groups or business development.
That’s how water rates ended up funding beef plants. A few years ago, IID granted $2.5 million to One World Beef, a slaughterhouse and beef processing plant that now employees over 250 people in Brawley.
The plant is in a building that was used by another slaughterhouse that closed, leaving behind a string of Clean Water Act violations, including a $3.7 million fine imposed by state water quality regulators against the out-of-state company that owned the plant.
Shields said the water district had been assured the new owners had the permits necessary to operate before IID turned over money to help the plant reopen under new ownership. That new company is led by a member of one of the Imperial Valley’s old farming families.
Another big business recipient of the fallowing-related money is California Ethanol & Power, which is trying to start an ethanol plant in the Imperial Valley.
Nonprofits have also gotten some of the money, including the Cancer Resources Center of the Desert. The center helps cancer patients get treatment and cope.
“We help people better understand this terrible disease,” said Helen Palomino, the head of the center.
Last year, IID approved giving the center $425,000, on top of an earlier grant.
IID has also given money to a theater company, the El Centro Police Activities League and to cities to help fund libraries, public works and a public pool.
The Metropolitan Water District of Southern California has a similar pot of money to compensate a farming district in the Palo Verde Valley on the California-Arizona border. That program is controlled by a third-party group and loans money, unlike IID, which gives it away as grants.
Both deals highlight a fundamental weirdness of California water law: Farmers or agencies, like IID, own rights dating back a century or more. As times change the rights don’t and there’s no easy way to redistribute water even if, say, San Diego has more than three million people and Imperial still has less than 200,000. But taking water from a region that has come to rely on it isn’t simple.
“Transfers are messy and there’re domino effects you don’t think of,” said Marion Champion, an IID spokeswoman.
If the state stepped in and took Imperial’s water for a city, not only would political hell break loose but the whole county, which is already economically depressed, could be ruined.
So, lawyers and economists get involved and figure out how to put a deal together to make everyone happy — and that usually involves throwing money at it.